lululemon athletica full year Fiscal 2016 results and slow start in 2017

lululemon athletica full year Fiscal 2016 results and slow start in 2017

Canadian lululemon athletic reports the full fiscal year 2016 and a slow start in 2017

For the fourth quarter ended January 29, 2017:

•             Net revenue increased 12 % to CAD 789.9 million from CAD 704.3 million in the fourth quarter of fiscal 2015. On a constant dollar basis, net revenue increased 12 %.

•             Total comparable sales, which includes comparable store sales and direct to consumer, increased 8 %, or by 7 % on a constant dollar basis.

•             Comparable store sales increased 6 %, or by 6 % on a constant dollar basis.

•             Direct to consumer net revenue increased 12 % to CAD 164.3 million, or by 12 % on a constant dollar basis.

•             Gross profit increased 21 % to CAD 427.9 million, and as a percentage of net revenue was 54.2 % compared to 50.3 % in the fourth quarter of fiscal 2015.

•             Income from operations increased 18 % to CAD 196.6 million, and as a percentage of net revenue was 24.9 % compared to 23.6 % in the fourth quarter of fiscal 2015.

•             Income tax expense increased to CADU 61.4 million from CAD 49.8 million in the fourth quarter of fiscal 2015, and the effective tax rate was 31.1 % compared to 29.8 % in the fourth quarter of fiscal 2015. Excluding certain tax and related interest adjustments, the effective tax rate was 30.6 % compared to 29.6 % in the fourth quarter of fiscal 2015.

•             Diluted earnings per share were 0.99 compared to CAD 0.85 in the fourth quarter of fiscal 2015. Excluding certain tax and related interest adjustments, diluted earnings per share were CAD 1.00 compared to CAD 0.85 for the fourth quarter of fiscal 2015.

For the fiscal year ended January 29, 2017:

•             Net revenue increased 14% to CAD 2.3 billion from CAD 2.1 billion in fiscal 2015. On a constant dollar basis, net revenue increased 14 %.

•             Total comparable sales increased 6 %, or by 7 % on a constant dollar basis.

•             Comparable store sales increased 4 %, or by 5% on a constant dollar basis. Company-operated stores which have been open for at least one year averaged sales of CAD 1521 per square foot.

•             Direct to consumer net revenue increased 13 % to CAD 453.3 million, or 13 % on a constant dollar basis.

•             Gross profit increased 20 % to CAD1.2 billion, and as a percentage of net revenue was 51.2 % compared to 48.4 % in fiscal 2015.

•             Income from operations increased 14 % to CAD421.2 million, and as a percentage of net revenue, was 18.0 % compared to 17.9 % in fiscal 2015.

•             Income tax expense increased to CAD 119.3 million from CAD 102.4 million in fiscal 2015, and the effective tax rate was 28.2 % compared to 27.8 % for fiscal 2015. Excluding certain tax and related interest adjustments, the effective tax rate was 30.7 % compared to 29.5 % for fiscal 2015.

•             Diluted earnings per share were CAD 2.21 compared to CAD 1.89 in fiscal 2015. Excluding certain tax and related interest adjustments, diluted earnings per share were CAD2.14 compared to CAD 1.86 in fiscal 2015.

The Company ended fiscal 2016 with CAD 734.8 million in cash and cash equivalents compared to CAD 501.5 million at the end of fiscal 2015. Inventories at the end of fiscal 2016 increased by 5% to CAD 298.4 million compared to CAD 284.0 million at the end of fiscal 2015. The Company ended the year with 406 stores.

Laurent Potdevin, CEO, lululemon, commented: “2016 marks a milestone year where our successful execution against long-term strategies returned the company to positive operating income growth for the first time in three years. These results reflect our strong brand and solid foundation now in place to drive our future performance.”

Potdevin added: “Although we’ve had a slow start to 2017, our teams are passionately committed to delivering on our robust plans across product innovation, digital, North America and international as we realize our ambitious vision for the future.”

Fiscal 2017 Outlook

For the first quarter of fiscal 2017, we expect net revenue to be in the range of CAD 510 million to CAD 515 million based on a total comparable sales decrease in the low-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of CAD 0.25 to CAD 0.27 for the quarter. This guidance assumes 137.3 million diluted weighted-average shares outstanding and a 31.2 % tax rate. The guidance does not reflect potential future repurchases of the Company’s shares.

For the full fiscal 2017, we expect net revenue to be in the range of CAD 2.550 billion to CAD2.600 billion based on a total comparable sales increase in the low-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of CAD 2.26 to CAD 2.36 for the full year. This guidance assumes 137.5 million diluted weighted-average shares outstanding and a 31.2 % tax rate. The guidance does not reflect potential future repurchases of the Company’s shares.

lululemon athletica inc. is a healthy lifestyle inspired athletic apparel company for yoga, running, training, and most other sweaty pursuits, with products that create transformational experiences for people to live happy, healthy, fun lives. Setting the bar in technical fabrics and functional designs, lululemon works with yogis and athletes in local communities for continuous research and product feedback. 

www.lululemon.com


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